Industry Challenges and Rising Costs Threaten E-Bus Expansion
Electric bus manufacturers in Canada, already struggling with supply chain disruptions and rising costs, now face additional pressure from looming U.S. tariffs. Experts warn that these tariffs could drive up bus prices, making it harder for Canadian transit agencies to afford fleet upgrades.
Josipa Petrunic, president of the Canadian Urban Transit Research and Innovation Consortium (CUTRIC), highlighted the immediate impact, stating that “buses become more expensive overnight,” leaving cash-strapped cities with limited options.
The North American transit manufacturing industry is deeply integrated, meaning parts and assembled vehicles move across borders frequently. Any tariffs imposed by the U.S. administration could increase costs at multiple stages—first on components shipped from the U.S. to Canada, and again when completed buses are exported back to the U.S.
Canadian cities had ambitious plans to transition to electric buses, but long production delays have forced many to reconsider. Manufacturers are dealing with extended wait times, outdated contract payment models, and excessive vehicle customization requests that slow down production.
Transit agencies, expecting e-buses to arrive on schedule, are now scrambling to keep aging diesel fleets operational. Ottawa’s OC Transpo, for instance, is relying on buses that should have been retired, resulting in higher maintenance costs and reduced reliability. Winnipeg and Saint John are also exploring diesel bus purchases to fill service gaps.
At a recent transit industry conference, manufacturers Nova Bus and New Flyer urged cities to adapt their procurement processes. “We lost half a billion dollars over three years,” said Christos Kritsidimas of Nova Bus. “We refinanced our business eight times during that time, but our contracts today don’t include conditions for price adjustments.”
Manufacturers argue that the payment model—where cities only pay after full delivery and testing—is no longer sustainable, especially as e-bus production takes significantly longer than traditional diesel buses.
Another major issue is the high degree of customization required by transit agencies. From driver seat adjustments to the placement of cupholders, every bus order comes with unique requirements, making mass production inefficient.
“When you overcustomize, you complicate things,” said Kritsidimas. “It causes procurement delays and raises costs.”
Efforts are underway to standardize designs, particularly for key components like batteries and charging systems, but legacy agreements and union negotiations continue to impact production efficiency.
The bankruptcy of U.S.-based e-bus manufacturer Proterra in 2023 serves as a cautionary tale. Cities like Edmonton, which had invested heavily in Proterra buses, were left with millions in losses and limited support for maintenance.
While industry leaders insist that companies like New Flyer and Nova Bus are financially stable, the sector remains fragile. Canadian manufacturers are seeking government support, warning that without policy changes, the transition to electric buses may stall indefinitely.
Despite these challenges, cities are still committed to reducing emissions, but the path forward remains uncertain. Transit agencies are facing difficult decisions—whether to wait out the delays or invest in diesel buses to maintain service levels.
Government subsidies have been crucial in funding e-bus projects, but potential political shifts could put these funds at risk. “We already don’t have enough transit buses in the country,” Petrunic warned. “If funding disappears, services will be cut, and riders will suffer.”
As Canadian cities attempt to navigate these roadblocks, transit agencies, manufacturers, and policymakers must work together to ensure a viable future for electric buses.